This document summarizes the US confectionery market in early 2009. It notes that the US and world economies were in recession in 2008, negatively impacting consumer spending and retail sales. Commodity prices for cocoa, sugar, and corn sweeteners reached historic highs in 2008. The confectionery category experienced retail sales growth of 2.2% but manufacturers' shipments grew only 1% as consumers shifted spending to value channels. Chocolate candy makes up 58% of the confectionery category. Seasonal confectionery sales, such as Easter and Christmas, declined in 2008 compared to previous years. Trends in 2009 included growth of everyday gourmet chocolate, dark chocolate, and value products.

1. United States
Confectionery Market
January 2009

2. U.S. Confectionery Market
Overview

3. 2008-2009 USA Economic Trends
•U.S. and world economies in recession
•Stock market declines 30%+
•Retail sales decline in second half of 2008
•Unemployment ends year over 7%
•Up from 4.6% at year-end 2006
•Housing market bubble burst
•Unstable oil prices
•Year ends with historically low interest rates
•Difficult to borrow – credit crunch
•Consumer spending declines
•Commodity prices higher

4. 2008-2009 USA Retail Trends
•Shopping trips declined
•Spending shift to value channels
•Increased coupon usage
•Confectionery seen as a recession proof category
•Organic sales decline
•2008 Holiday retail sales declined
•Other than gasoline purchases retail sales declined
1.5% in December vs 2.4% growth in 2007
Credit crunch and lost investments impacting consumer spending

5. Cocoa Prices at Historic Highs
Cocoa price per ton
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
2003
2004
2005
2006
2007
2008

6. Sugar Prices near Historic Highs
U.S. Cents per pound
45
40
35
30
25
20
15
Refined beet sugar f.o.b. Midwest
10
5
0
2003
2004
2005
2006
2007
2008

7. Corn Sweetener Prices near Historic Highs
U.S. $ per pound
$10
$9
$8
$7
$6
$5
$4
$3
$2
$1
$0
2003
2004
2005
2006
2007
2008

8. Commodities Pricing
Milk
Corn Syrup
Peanuts
Walnuts
Pistachios
Almonds

9. The 2008 U.S. Confectionery Market
The U.S. Retail Confectionery Category generates
approximately $28 billion in retail sales
Retail Sales
Manufacturers Shipments
Domestic Manufacturer Shipments
Imports
Exports
$
$28.0
$18.3
$17.5
$2.0
$1.2
%
Change
+2.2%
+1.0%
+1.0%
+0.2%
+21.6%
The profit margin is approximately 35% for the confectionery category.
Estimated sales in billions
Estimates based on NCA Shipment Data and Global Trade Atlas Import/Export Data

10. 2008 Confectionery Sales
Manufacturers $ sales grew 1% in 2008
Category
Retail Sales
Manf. Sales
%
Lb. Sales
%
Total
$28.0 Billion
$18.3 billion
+1.0%
6.9 Billion
-4.0%
Chocolate
$15.9 Billion
$10.3 billion
+2.9%
3.4 Billion
-1.9%
Non-Choc.
$8.6 Billion
$5.7 billion
+3.8%
2.9 Billion
-7.9%
Gum
$3.5 Billion
$2.2 billion
+4.1%
0.6 Billion
+0.1%
NCA Estimates base on U.S. Dept. Of Commerce MA311D Report and NCA Monthly Shipment Reports
2008US Department of Commerce 311D Confectionery Report
2008 NCA Monthly Shipment Reports through November 2008

11. 2008 Confectionery Sales
Retail Sales Summary
Trade
Measured
Total Sales
Confections
% Growth
vs. 2007
Chocolate
Confections
% Growth
vs. 2007
Non-Chocolate % Growth
Confections
vs. 2007
Gum
% Growth
vs. 2007
FDMx
$8.8 billion
+2.0%
$5.0 billion
+1.9%
$2.5 billion
+0.2%
$1.3 billion
+6.1%
FDMW
$12.4 billion
+1.4%
$6.9 billion
+1.2%
$3.6 billion
-1.2%
$2.0 billion
+6.2%
FDMWC
$16.8 billion
+2.2%
$8.6 billion
+2.3%
$4.9 billion
+0.1%
$3.2 billion
+4.9%
All Others
$11.4 billion
*
$7.3 billion
*
$3.7 billion
*
$0.3 billion
*
Total Sales
$28.0 billion
+2.2%
$15.9 billion
+2.3%
$8.6 billion
+0.1%
$3.5 billion
+4.9%
Trade Channels:
F – Supermarkets
D – Drug Stores
M – Mass Merchants
W – Wal-Mart
C – Convenience Stores
NCA Estimates base on U.S. Dept. Of Commerce MA311D Report and Information Resources, Inc.
2008 US Department of Commerce 311D Confectionery Report
2008 IRI Reports through 12/28/08

12. 2007 Per Capita Retail Sales
$100
$90.73
$80
$51.32
$60
$40
$28.95
$20
$7.97
$0
Total
Chocolate
Non Chocolate
Gum
The average U.S. Consumer spent $91 on confectionery products in 2007
Department of Commerce Data is released in late summer. Please return in August for actual 2008 data.
2008 US Department of Commerce 311D Confectionery Report

13. Chocolate Candy represents approximately
58% of total confectionery dollar sales.
2007 Confectionery Categories Analysis
Category
Retail Sales
$ Billions
Domestic
Shipments
$ billions
Shipment
% Growth
Vs. 2006
Imports
$ billions
Import %
Growth
Vs. 2006
Exports
$ billions
Export %
Growth
Vs. 2006
Total
Confections
$27.4
$16.5
+3.0%
$2.2
-0.8%
$0.9
+15.0%
Chocolate
$15.5
$9.9
-0.3%
$0.8
+4.6%
$0.6
+18.9%
Non-Chocolate
$8.7
$4.7
-0.8%
$1.2
-4.9%
$0.3
+12.9%
Gum
$2.4
$1.5
+4.1%
$0.1
+8.1%
$0.1
-15.4%
This analysis shows figures for 2007 shipments and retail sales. The chart will be updated in August.
NCA estimates based on Source:
2008 US Department of Commerce,
Census Bureau 311D, Confectionery Report and
NCA Manufacturer Shipment Reports

14. The Confectionery Market is Very Diverse
All Other
19%
Private Label
2%
There are more than
300
domestic confectionery
manufacturers
Next 11 -30
8%
Top 5
64%
Next 6-10
7%
Manufacturer Market Share Concentration
•
The confectionery category is much more diverse than other similar sized food categories.
•
There are 300+ suppliers competing for the remaining 30% of confectionery sales.
•
The uniqueness of the confectionery category is that each suppliers makes distinctly different items
catering to the diverse tastes and demands of the consumer.
52 Week Sales December 30, 2008 Euromonitor

15. U.S. Confectionery
The Retail Market

16. Retail Confectionery
Market Share by Trade Channel
Warehouse Clubs*
7.6%
Bulk
4.8%
Vending
3.6%
Dollar Stores*
3.0%
Others
22.7%
Drug Stores
9.3%
Mass X Wal-Mart
4.8%
Supermarkets
16.2%
Wal-Mart
12.8%
Convenience Stores
15.2%
*estimates
* * Others include: department stores, food service and ingredient sales, fundraising, give-aways,
independent grocers, mail order/internet, military, specialty/candy stores, theaters and concessions
NCA 2008 estimates based on IRI, U.S.
Department of Commerce, MSA
Vending Data, NCA Shipment Report
and other industry sources.

17. 2008 Retail Channel Performance
Based on 52 Week Sales – January - December 2008
Channel
Supermarkets
Wal-Mart
Mass X Wal-Mart
Convenience Stores
Drug Stores
*Warehouse Clubs
*Dollar Stores
Vending
*Bulk
2008 $ Sales
$4.7
$3.7
$1.4
$4.4
$2.7
$2.3
$.9
$1.1
$1.4
2008 % Growth
+1.6%
-0.1%
+0.1%
+4.3%
+3.7%
+3.0%
+2.1%
-1.5%
-0.5%
The confectionery retail market has grown across all trade channels but convenience stores, club stores,
dollar stores and chain drug stores have outpaced the overall retail market.
* Indicates NCA estimate
•Source: NCA estimates based on input from Information Resources, Inc.
NCA/CMA Monthly Shipment Reports and U.S. Department of Commerce.
•Sales Figures in billions

18. Total Chocolate/Non-Chocolate/Gum
Dollar Share
CHOCOLATE
CANDY
58%
GUM
9%
NON-CHOCOLATE
CANDY
33%
U.S. Department of Commerce Census
Bureau 2008 MA 311D Report

19. Candy and Gum Ranked 3rd
Among 2008 Food Categories
$ Billions
$0.0
$3.0
$6.0
$9.0
$12.0
-0.1%
Carbonated Beverages
Product Categories
Milk
+2.6%
Candy& Gum
+2.0%
Salty Snacks
+7.2%
Cereal
+2.9%
Ice Cream
+0.9%
Soup
+4.5%
Cookies
Bottled Juice
$15.0
$13.50
$12.80
$8.80
$8.50
$6.60
$4.50
$4.30
+0.1% $4.00
IRI Food, Drug & Mass
Excluding Wal-Mart 12/28/2008
+0.8% $3.80
Candy and Gum Ranked 3rd among 2008 Food Categories in Food, Drug and Mass Outlets

20. Candy and Gum is the
Largest Snack Category
$ Billions
$0.0
$2.0
$4.0
$6.0
+2.0%
Candy& Gum
Product Categories
Salty Snacks
+7.2%
Ice Cream
+0.9%
Bakery Snacks
$10.0
$8.80
$8.50
$4.50
+0.1% $4.00
Cookies
Snack/Granola Bars
$8.0
+2.1%
$2.30
$1.00 -0.3%
Dry Fruit
$0.50 -3.6%
Misc. Snacks
$0.30 +25.6%
IRI Food, Drug & Mass
Excluding Wal-Mart 12/28/2008

21. Confectionery
Seasonal Merchandising

22. What Affects Seasonal Sales?
•Date/Day of Holiday
•The Economy
•Consumer Confidence
•Merchandising Strength/Visibility

23. Confectionery Seasonal Sales
(** in millions of dollars)
2005
Valentine’s Day - $970
Easter $1,761
Halloween $2,088
Christmas $1,375
2006
$971
$1,884
$2,146
$1,389
Results and Projection as of January 2009
Source: Sales figures are compiled by National Confectioners Association
based on input from Information Resources, Inc. NCA/CMA Monthly Shipment
Reports and U.S. Department of Commerce
2007
$1,036
$1,987
$2,202
$1,420
2008
$1,024
$1,846
$2,209
$1,376
2009 projections
$1,000*
$1,990*
$2,225*
$1,400*

24. Total Confectionery Seasonal Shares
Valentine's Day
16%
Easter
29%
Christmas
21%
Halloween
34%
•
•
NCA estimates based on December 28, 2008 IRI Data, NCA Manufacturers Shipment Reports and
U.S. Department of Commerce MA311D Report
Syndicated IRI data understates actual seasonal sales. It only includes packages with seasonal
graphics, and does not count regular packs sold during the season

25. Seasonal Confectionery Trends
2008
2007
2006
2005
2004
2003
-7.6%
VALENTINE’S
-0.2% +6.7%
+0.1%
-4.0%
-3.0%
EASTER
-7.1% +5.4%
+7.0%
-7.6%
+5.5% +2.2%
HALLOWEEN
+0.1% +2.6%
+2.8%
+2.3% +2.4% +0.7%
CHRISTMAS
-3.1% +2.2%
+1.0%
+2.4%
-3.5%
* IRI FD&M
NCA projects a 2.0% increase in 2009
-1.4%

26. Holiday Dates/Days
Holiday
2009
2010
2011
2012
2013
Valentine’s
Sat.
Sunday
Monday
Tuesday
Thursday
Easter
4/12
4/4
4/24
4/8
3/31
Halloween
Christmas
Sat.
Sunday
Monday
Wed.
Thursday
Friday
Sat.
Sunday
Tuesday
Wed
Thanksgiving
11/26
11/25
11/24
11/22
11/28
Shopping Days
29
30
31
33
27
Indicates positive date for holiday sales
Indicates neutral date for holiday sales
Indicates negative date for holiday sales

27. U.S. Confectionery
Trends

28. Trends - for 2008/2009
•Everyday gourmet chocolate sales rose 28% in 2008
•Growth slowed in second half of 2008
•Dark chocolate sales continue to grow but at a slower pace
•Dark chocolate sales increased 12%
•Core mass brands grew in units and dollars
•Emerging trends
•Exotic chocolate flavorings: citrus, spice, salt, fruits
•High cocoa content chocolates
•Gourmet packaging for chocolates
•Single origin chocolates
•Increased offering of “Everyday Gourmet” chocolate items
•Consumers want gourmet product at a value price

29. Trends - for 2008/09
•Sugar Free gum - +11.0% sales
•Exotic fusion flavors
•Fortified products
•Value products grew significantly
•Theater Box candies
•Licorice grew 9.4%
•Gummies and chewy candy grew 7.6%
•Seasonal candy declines
•Reflection of difficult economy and unfavorable dates
•Seasonal confectionery down 2.9%
•More favorable dates in 2009
•Increased sugar-free product offerings
•Increase lower calorie products offered